On March 31, GAC Group released its 2021 financial report. While achieving both revenue and net profit growth, the company's joint venture sales volume overall performance was not good. In addition to GAC Toyota, GAC Honda, GAC FCA and GAC Mitsubishi all declined to varying degrees. Under the strong performance of its independent camp, GAC Aean revealed the news that it plans to choose an IPO next year.
The overall performance of the joint venture segment was poor
According to the annual report, in 2021, GAC Group achieved a total operating income of 75.676 billion yuan in consolidated statements, an increase of 19.82% year-on-year; a net profit attributable to shareholders of the parent company of 7.335 billion yuan, an increase of 22.95% year-on-year; and a net profit attributable to the mother after deducting non-deductions of 5.977 billion yuan, an increase of 24.33% year-on-year.
As for the reasons for the growth in performance, GAC Group pointed out that "due to the stable and good domestic economy, the production and sales of the automotive industry continued to grow positively, although the growth rate in the second half of the year slowed down month by month, the Group's own brand model products continued to enrich, sales continued to grow, especially the substantial growth in sales of Eian new energy vehicles and other comprehensive results."
In terms of R&D investment, GAC Group spent a total of 5.165 billion yuan in 2021, an increase of 0.78% year-on-year. The group focuses on the core three-electric technology and promotes the integration of intelligent network integration. In 2021, GAC Group's capitalized R&D investment reached 4.338 billion yuan, accounting for 83.99% of capitalization. In addition, as of December 31, 2021, GAC Group's cash and cash equivalents amounted to approximately RMB22.34 billion, a decrease of 15.03% year-on-year.
In terms of sales, GAC Group produced and sold 2,138,100 units and 2,144,400 units last year, respectively, up 5.08% and 4.92% year-on-year. Sales of new energy vehicles reached 142,900 units, up 77.35% year-on-year, accounting for 6.7%. Specific to the sales volume of the group's brands, the sales growth of independent brands is significantly better than that of joint venture brands. GAC Trumpchi sold 324,200 new cars last year, an increase of 10.35% year-on-year, launched a new or modified model such as Shadow Leopard, GS4 PLUS, second-generation GS8, M6 Pro, etc.; in the field of new energy, GAC AEan launched three new products in 2021, AION Y, AION S PLUS and AION V PLUS, and handed over 120,000 units for the whole year, higher than the target of 100,000 vehicles set at the beginning of the year, with sales increasing by 101.8% year-on-year.
However, only GAC Toyota, the group's joint venture brand, achieved positive growth, with annual sales of 828,000 new vehicles, an increase of 8.23% year-on-year. GAC Honda sold 780,400 units, down 3.17% year-on-year; GAC Mitsubishi sold 66,000 units last year, down 11.99% year-on-year; and Guangqi Motor sold about 20,000 units, down 50.33% year-on-year. Guangqi Honda, in particular, suffered from chip shortages, and the brand's sales fell badly in the third quarter, and it was not until the fourth quarter that it returned to normal levels.
"GAC Aeon strives for an IPO next year"
Previously, the issue of GAC Aean's mixed reform IPO has attracted the attention of the industry. At the group's annual report release and communication meeting held on the 31st, chairman Zeng Qinghong said that GAC Aian, a wholly-owned subsidiary of GAC Group, has completed employee equity incentives and is expected to complete the A round of financing this year and strive for an opportunity IPO next year. At the same time, Feng Xingya, general manager of GAC Group, said that there are already many institutions interested in GAC A-an's series A financing. In the future, E-an's goal is to turn "Wei Xiaoli" into "An Xiaowei" and become a leader.
However, at the media communication meeting of gac group annual report, Feng Xingya also admitted that the chip shortage and raw material price increases in the entire automotive industry have caused GAC group to be hit hard. Not only the joint venture section of Guangqi Honda, which originally produced and sold at least 900,000 vehicles, but in the end it only had 780,000 vehicles. Independent brands such as GAC Trumpchi are also subject to the shortage of chips, resulting in a disruption in growth.
Chip shortages have become a major reason why GAC Honda's sales fell short of expectations last year.
In fact, the various uncertain risks faced by GAC Group are still not small. First, supply chain risk. As there is still uncertainty about the global COVID-19 pandemic, it is expected that the global chip tension will continue and the process of chip replacement will be slow. Although the company has optimized its model scheduling plan by strengthening cooperation with chip manufacturers, if the shortage of chip supply continues, it will still have a greater impact on production and operation. In addition, if the international geopolitical conflict continues to intensify, it may also lead to the continuous prolongation of the obstruction of the global supply chain, which will affect the company's production and operation.
Second, there is the risk of rising raw material costs. Since 2021, the price of raw material market conditions has remained stable after rising to a high level, and there has been no significant decline, and the unit price of energy has risen, making car companies face greater cost pressure. Although the company has taken cost control measures, the continued high price of raw materials will lead to greater cost pressures and bring uncertainty to the achievement of profit targets for the entire company.
There are also policy risks. In order to adapt to increasingly stringent emission standards and meet the requirements of the "double credit" policy, car companies must make reasonable adjustments to product development plans and product structures. In the context of the further decline of new energy subsidies, new energy vehicle companies also need to further control costs while continuing to enhance product competitiveness to reduce dependence on subsidy policies, which will inevitably face greater operational pressure.
According to the plan, GAC Group has set a target of challenging the annual car sales growth rate of 15% year-on-year in 2022, which means that sales will reach more than 2.46 million units this year. To this end, GAC Group plans to launch more than ten new and redesigned models to further improve its product structure. However, under the influence of many of the above uncertainties, it is really difficult to say whether the goal can be achieved.
Nandu reporter Liang Luozhe